The $75,000 rule
You must register for GST when your GST turnover reaches $75,000. The ATO tests this two ways, and either one triggers it:
- Looking back: your turnover for the current month plus the previous 11 months is $75,000 or more.
- Looking forward: your turnover for the current month plus the next 11 months is likely to be $75,000 or more. Signing a large contract can put you over before the money arrives.
GST turnover is your gross business income, not your profit, and it excludes the GST itself. The threshold is $150,000 for non-profit organisations. Taxi and ride-share drivers must register from the first dollar, whatever their turnover.
When you cross the line you have 21 days to register. Register late and the ATO can backdate your registration, which means paying GST on sales you never charged it on.
Under $75,000: it's your call
Below the threshold, registration is voluntary. It's worth it when:
- most of your clients are businesses, because they claim the GST back and your price is the same to them either way;
- you have real expenses with GST in them (equipment, software, materials, a car), because registering lets you claim those GST credits;
- you're heading past $75,000 anyway and would rather set things up once.
It's usually not worth it when your customers are households and your costs are low: you're 10% dearer than an unregistered competitor, and you take on a Business Activity Statement (BAS) every quarter. Voluntary registration is a 12-month minimum.
Not registered: what your invoice looks like
- Title it Invoice, not Tax Invoice. The words "tax invoice" are reserved for registered businesses.
- Show your name, your ABN, the date, an invoice number, what you did, and the total.
- No GST line, no "plus GST", no "includes GST". Many people add a line such as "No GST has been charged" so nobody asks.
- Quote your prices as the full price. There is no GST to add later.
You still need an ABN. Without one on an invoice over $75, the business paying you must withhold 47% of the payment and send it to the ATO.
Registered: what changes
- Add 10% GST to taxable sales. Most goods and services are taxable; basic food, most health and education, and exports are GST-free.
- Title the document Tax Invoice and show the GST amount, or state that the total includes GST. Your customer needs a valid tax invoice for anything over $82.50 to claim the GST back, and you must supply one within 28 days of being asked.
- Report and pay the GST on your BAS, usually quarterly, less the GST credits on your own purchases.
- Prices you show to consumers must include the GST.
Worked example
Mara designs logos. Her invoices came to $68,000 last financial year, and this quarter she signed a $30,000 rebrand. Her next 12 months now look like $95,000, so she must register within 21 days of working that out. Her next invoice for a $2,000 job:
| Before registration | After registration | |
|---|---|---|
| Heading | Invoice | Tax Invoice |
| Logo design | $2,000.00 | $2,000.00 |
| GST | — | $200.00 |
| Total | $2,000.00 | $2,200.00 |
The $2,000 quote she gave a business client "plus GST" is fine. A $2,000 quote to a household with no mention of GST is the total: she'd invoice $2,000.00 including $181.82 GST.
When you register part-way through the year
GST applies to sales from your registration date onward, not to earlier invoices. Tell your clients, re-quote open jobs, change your document title to Tax Invoice, and put "plus GST" or a GST-inclusive total on your price lists. Your ABN stays the same; the GST registration attaches to it.